The New World Economy: How to Prepare for What’s Coming
Published: 2025-05-02
Status:
Available
|
Analyzed
Published: 2025-05-02
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
US government interest payments to reach nearly $1 trillion in 2025.
"And in 2025, the United States government is expected to pay a little bit under $1 trillion in interest."
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In the first four months of 2025, the US government spent $838 billion more than it collected in taxes.
"In the first 4 months of 2025, the United States government spent $838 billion that they did not have, which means it spent $838 billion more than what they generated from taxes."
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Inflation is characterized by an increase in the monetary supply (more dollars in circulation).
"What do you inflate when you have inflation? You're inflating the monetary supply. You're increasing how many dollars are out there."
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Government deficit spending negatively impacts the average person, with COVID-related spending exacerbating this.
"This is why government deficit spending hurts the average person. And let's take this one step further by talking about how number four, COVID made it worse."
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The 'free money' from COVID stimulus led to inflation problems that persisted from 2020 through at least 2025.
"But now the impact of all that free money was of course the inflation problem that we saw in 2020 and 2021 and 2022 and 2023 and 2024 and even still in 2025."
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Between 2020 and 2025, despite rising salaries and high stock market gains, a significant portion of the average population became poorer due to inflation outpacing salary increases.
"The reported inflation rate reported was 23%. While the stock market went up by 80%. Investors who understand the game and Wall Street who understand how this works got rich. The average person became poorer."
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The demographic shift of an aging workforce retiring while fewer people enter it could create government financial problems over the next 10-20 years if expenses are not controlled.
"We'll see the impact of how that really plays out over the next 10 to 20 years. But if we don't start to see more people entering the workforce with more people retiring, well, that could create a little bit of a problem for the government, if expenses don't start to get controlled."
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Concerns about the US government's ability to repay its debt will lead to increased interest rates.
"Because when the United States government has a debt concern and people are worried about the United States government's ability to pay off their debt, interest rates go up."
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The long-term consequences of current government debt levels will become apparent over the next 10-20 years.
"And we'll see the impact of how that really plays out over the next 10 to 20 years."
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Rising treasury yields will result in higher interest rates for mortgages, car loans, and credit cards.
"As treasury yields go up by the government, your mortgage rates go up, your car loan rates go up, your credit card rates go up."
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Rising US Treasury yields, driven by government debt concerns, will lead to increased interest rates on mortgages, car loans, and credit cards.
"As treasury yields go up by the government, your mortgage rates go up, your car loan rates go up, your credit card rates go up."
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Increased national debt concerns leading to higher Treasury yields will force businesses to pay more for borrowing, potentially reducing their profitability.
"So, when Treasury yields go up because people are concerned about the national debt like we've been seeing happen, that means businesses have to pay higher rates of interest to borrow that money. When businesses pay higher rates of interest to borrow that money, that can lower the profitability of businesses."
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Increased borrowing costs for businesses due to higher interest rates can reduce profitability, negatively impacting employee raises.
"When businesses pay higher rates of interest to borrow that money, that can lower the profitability of businesses. And if businesses are struggling to grow their profits, that can also impact when you get a raise and how big a raise is going to be."
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Reduced business profitability due to higher borrowing costs could lead to smaller or no salary raises for employees.
"And if businesses are struggling to grow their profits, that can also impact when you get a raise and how big a raise is going to be. Because if a business has bigger profits, it's easier for them to give you a bigger raise. If they're not making as big of profits, they're not going to give you that same raise."
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A growing portion of tax dollars will be allocated to interest payments on government debt, reducing funds available for public services like schools, roads, and hospitals.
"if the government keeps paying more and more of its tax dollars in interest, that means the government is going to have less money to pay for schools and roads and hospitals because it's using so much of these tax dollars to pay off interest for their previous expenses as opposed to providing services for citizens today."
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Over the next 5-20 years, increased government spending on interest payments will reduce funds available for essential services like schools, roads, and hospitals.
"Because the concern that people have to think about for the next 5, 10, 20 years is if the government keeps paying more and more of its tax dollars in interest, that means the government is going to have less money to pay for schools and roads and hospitals because it's using so much of these tax dollars to pay off interest for their previous expenses as opposed to providing services for citizens today."
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Historical instances show that excessive government borrowing leads to a loss of investor confidence in the currency.
"the common theme in each one of these times was a government borrowed too much money and investors started to lose confidence in the currency."
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Investors are increasingly vocal about the US national debt, fearing it is unsustainable and could lead to a lack of confidence in investing in the US, resulting in market volatility.
"And we're also starting to see more investors get vocal about the national debt levels for the United States government because they're concerned that these national debt levels could create problems later down the line. It might not be sustainable, which could create concerns about people investing their money into the United States, which could create more volatility in the markets like we've been seeing happen."
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The United States currently retains its status as the world's reserve currency.
"Now, we still have the power of being the world's reserve currency."
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Central banks globally are increasing their physical gold reserves to potentially strengthen their national currencies.
"Now, we've been seeing more and more central banks around the world stockpile more physical gold as a way to potentially strengthen their currencies."
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Significant economic changes are anticipated over the next 10-30 years, with those who understand these shifts building wealth while others are negatively impacted.
"The reality is we're going to see changes happen over the next 10, 20, and 30 years. And the people that understand this are going to be able to build wealth while everybody else is going to get blindsided and they're going to get angry and they're going to lose and be left behind."
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Individuals who understand upcoming economic changes will build wealth, while those who don't will be negatively impacted.
"And the people that understand this are going to be able to build wealth while everybody else is going to get blindsided and they're going to get angry and they're going to lose and be left behind."
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Historically, currencies have demonstrated the ability to both rise and fall, necessitating strategies for self-protection.
"And we also know if we look at history that currencies can rise and fall and you want to always be able to protect yourself no matter what happens."
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Investors should consider owning real assets such as real estate, stocks, businesses, physical gold, or cryptocurrencies to generate returns, rather than solely relying on currency.
"Whether it's real estate, whether it's stocks, whether it's businesses, whether it's physical gold, maybe some people it's cryptocurrencies. Whatever these assets are, you want to own real assets that can give you a return on your money instead of just owning a currency."
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Historical examples of currency crises include Latin America in the 1980s, Asia in 1997, Russia in 1998, and the UK's Black Wednesday in 1992.
"I mean we saw happened with Latin America in the 1980s, Asia 1997, Russia in 1998 and in the United Kingdom on Black Wednesday in 1992."
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Inflation erodes the value of currency, while assets can provide protection against this devaluation.
"we know that when you have concerns about inflation, the value of your currency goes down versus when you own assets, those can be protected."
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A recurring factor in currency crises is excessive government borrowing leading to a loss of investor confidence in the currency.
"And the common theme in each one of these times was a government borrowed too much money and investors started to lose confidence in the currency."
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In 2025, the US government was projected to pay nearly $1 trillion in interest on its debt.
"And in 2025, the United States government is expected to pay a little bit under $1 trillion in interest."
Pending
For the first four months of 2025, the US government had a deficit of $838 billion, spending more than its tax revenue.
"In the first 4 months of 2025, the United States government spent $838 billion that they did not have, which means it spent $838 billion more than what they generated from taxes."
Pending
The economic stimulus provided during COVID-19 has contributed to persistent inflation extending into 2025.
"But now the impact of all that free money was of course the inflation problem that we saw in 2020 and 2021 and 2022 and 2023 and 2024 and even still in 2025."
Pending
A declining workforce due to an aging population and fewer new entrants could strain government finances if expenses are not managed, with impacts expected over the next 10-20 years.
"We'll see the impact of how that really plays out over the next 10 to 20 years. But if we don't start to see more people entering the workforce with more people retiring, well, that could create a little bit of a problem for the government, if expenses don't start to get controlled."
Pending
Central banks globally are increasing their gold reserves to potentially bolster their national currencies.
"Now, we've been seeing more and more central banks around the world stockpile more physical gold as a way to potentially strengthen their currencies."
Pending